How tax platforms can drive corporate data analytics.

• Author: Mehlman, Marc
• Position: PERSPECTIVE

Data analytics, over time, has had an unquestionable impact on how we do business, affecting consumers and the corporations that serve them. The impact on corporations has been both externally and internally focused, and now it's time for tax departments to get in on the revolution. Data analytics is opening doors for corporate tax departments to extend their reach throughout their organizations.

By definition, data analytics is the process of drawing specific conclusions from large volumes of seemingly disparate, unrelated, and inconsistent data. It's nothing new in itself. Predicting the weather, a practice that has been around for a long while, is an example of leveraging data analytics. As in weather forecasting, the capabilities of conventional data analytics--capabilities grounded in advances in how data is stored and processed-have exploded, allowing for more accurate and meaningful forecasts.

Today's technological advances are built on a number of pillars, including the availability of large amounts of data coupled with the technical capability to store, access, process, and connect that data to draw conclusions that are more dynamic, specific, and meaningful. Weather predictions, to use our earlier example, have become far more accurate in recent years, because today analysts can leverage sophisticated and previously unavailable algorithms and datasets to model the environment at a molecular level. That's lightyears ahead of predicting rain based on aches and pains.

Let's bring the concept a bit closer to home. Corporate data analytics programs, the ones that work as advertised, combine both structured and unstructured data. They also incorporate all of the departments that provide data and, more important, process that data for external consumption. This means tax must be in the mix, and, for tax departments to participate properly, the right platform must be leveraged. The correct platform allows tax departments to develop an automated process to combine structured and unstructured financial data into one consistent, usable format that is compliant and reportable across multiple constituencies.

Data: Structured and Unstructured

Data in enterprise resource planning (ERP) systems and other relationship management tools is structured, whereas data in most spreadsheets, workpapers, and workflow applications such as email and calendars is unstructured. Tax departments use both structured and unstructured data but tend to lack a reason...